1) The secondary market refers to the market where existing securities are traded, providing a platform for investors to buy and sell securities that are already listed on a stock exchange. 2) The primary difference between the primary and secondary market is that in the primary market, securities are first offered to the public for subscription to raise capital, while in the secondary market, already existing securities are traded. 3) Stock exchanges like NSE provide a trading platform regulated by SEBI, where transactions in securities can be done electronically through systems like NEAT.

1. Secondary Market

2. Meaning of Secondary Market
Refers to a market where securities are traded
Securities are already listed in Stock
Exchange
Provides an efficient platform for trading of
his securities

3. Difference between Primary Market &
Secondary Market
Primary Market Secondary Market
• Securities are offered to • Already existing
public for subscription securities are traded
• Purpose of Raising • Purpose of capital
Capital or fund appreciation

4. Stock Exchange
Provide a trading platform
by SEBI
Where transaction done in
securities

5. Demutualization of Stock Market
Refers to the legal structure
of an exchange
Ownership, management
and the trading rights at the
exchange are segregated
from one another

6. Demutualised Stock Exchanges in India
National Stock Over the
Exchange Counter
(NSE) Exchange of
India (OTCEI)

7. Stock Trading

8. Screen Based Trading System (SBTS)
Introduced by NSE
Where a member can punch quantities and price of
security in computer
Transaction is executed as soon as a matching sale or buy
order from a counter party is found

9. National Exchange for Automated Trading
(NEAT)
A satellite communication technology for
trading
It’s a state of the art client server based
application
Has a uptime record of 99.7%
Uniform response time of less than one
second

10. Contract Note
A confirmation of trades done on particular day
On behalf of the client by a trading member
Enforceable relationship between the client and the
trading member
For the propose of purchase / sale and settlement
of trades
It should be in Prescribed Form

11. Benefits of trading in Stock Exchanges
• Best prices prevailing at the time in the market
1.
• Lack of any counter party risk which is assumed by
2. the clearing corporation
• Access to investor grievance and redressal
3. mechanism of stock exchange
• Protection up to prescribed limit
4.

12. How to know if the Broker / Sub Broker is
Registered?
By verifying the registration certificate
issued by SEBI
Broker registration number begins with
the letter ‘INB’
A sub broker with the letters ‘INS’

13. Precautions of investing in the Stock
Markets
Make sure your broker is registered with SEBI and the
Exchanges
Ensure that you receive contract notes for all your
transactions
Invest in a manner that matches their risk tolerance
Do not be misled by market rumors, luring
advertisement or ‘hot tips’
Take informed decisions by studying the fundamentals
of the company

14. Instruments of Secondary Market
Secondary
Market
Shares Bonds
Zero
Equity Rights Bonus Preference Convertible Treasury
Coupon
Shares Shares Shares Shares Bond Bills
Bonds
Cumulative
Cumulative Convertible
Preference Preference
Share Shares

15. Shares
Equity Shares
• Represent the form of fractional ownership in a
business venture
Rights Shares
• Issue of new securities to existing shareholders
Bonus Shares
• Issued by the companies to their shareholder
free of cost based

16. Preference Shares
Entitled to get fixed
dividend before equity
shareholders
Priority of getting surplus
before equity shareholder
At the time of liquidation
their claims below to
equity shareholders

17. Types of Preference Shares
Cumulative
• Dividend accumulates if remained
Preference unpaid
Shares
Cumulative • Dividend payable on the same
Convertible accumulates, if not paid
Preference • Converted into equity capital of the
Shares company

18. Bond
Negotiable certificate
evidencing Normally Unsecured
indebtedness
Issued by a Company,
Municipality or
Government Agency

19. Types of Bond
• Issued at discount and repaid at face
Zero Coupon Bond value
• No periodic interest is paid
• Giving the option to the investor
Convertible Bond • Convert the bond into equity at
fixed conversion price
• Issued by government
Treasury Bills • Short term bearer discount security

20. Equity Investment
Provides portfolio with growth
Reach on long term investment goals
Equities are high risk investment

21. Dividend
A company returns
A percentage of
to its shareholders
the face value of a
from its annul
share
profits

22. Factors affected the price of stock
Stock Specific
Market Specific

23. Stock Specific Factor
Level of
Technology
Financial & Marketing
Health Skills
Management
Future
Earning
Capacity
People
Expectation
about the
Company

24. Market Specific Factor
Generally short
term factor
Depends upon on
the environment
rather than
performance
Its include
Budget, War
Economic
Growth & Crises
etc.

25. Growth Stock
Whose potential
for growth in
sales
Growing
faster than
Earning are
other
excellent
companies in
market

26. Value Stock
Investor look to
Stock which
buy stokes that
may have
are
hidden value
undervalued

27. Portfolio
Purpose of
Combination of different
achieving an
investment assets
investor’s goal

28. Diversification
It’s A Risk Mixes a Reduce the
Management wide variety risk in
Technique of portfolio
investments
with in
portfolio

29. Debt Instruments
Represents a contract whereby one party
lends money to another

30. Debt Instruments
Bond Debenture
Issued by the Issued by
central and state private
government corporate sector
Public sector
organization

31. Features of Debt Instruments
• The date on which
borrower has agreed
Maturity
to repay the
principal
• Refers to the
periodic interest
Coupon payment that are
made by borrower
to lender
• The amount that
Principal
has been borrowed

32. Segment of Debt Market
• Comprises the Centre, State and
Government state sponsored securities
Securities • They are not tax –free
Public Sector • They are tax –free
Units Bonds
Corporate • Comprise of commercial paper
Securities and bonds

33. Participants of Debt Market
Financial
Banks
Institutions
Provident Mutual
Funds Funds
Insurance
Corporate
Companies